Homeownership is the cornerstone of the American dream. For over two hundred years there has been an implicit promise that if you work hard, then you will be able to carve out a space for you and your family. But since the Great Recession of 2008, that promise has been delayed, or outright denied for many millennial Latinx. Now, research from a number of groups indicates that millennial Latinx are on the verge of becoming a central force in total Housing Market Growth.
According to the Joint Center for Housing at Harvard University’s study, “The State of the Nation’s Housing,” three-quarters of all gains in U.S. Households will be driven by minorities, and one-third of the gains will come from Hispanics.
But despite the fact that the rate of Hispanic homeownership has increased for the second year in a row, according to a 2016 report by the National Association of Hispanic Real Estate Professionals, Latinx millennials still lag behind their white peers when it comes to homeownership. Research by Young Invincible have only 27% of Latinos between 25 and 34 years old owning homes in 2013, compared to 51% of white millennials.
For a city like Rochester, highly segregated both racially and economically, the prospects can be especially bleak. Although housing projects continue to thrive in the city, developers are finding themselves at odds with the market. While many of the high-end units move quickly, the middle-market units are often difficult to fill.
“It’s a challenge trying to figure out what the market wants,” developer Tom Massachi said to the Democrat and Chronicle, although he later noted that developers are looking to place more single bedroom and studio units in buildings, despite the high demand for units with more than a single bedroom.
For many millennials, the extra bedroom is more than a vanity item. For Pamela Cervera and her boyfriend Christopher Maxwell, who purchased a Condo in Northwest D.C., the extra bedroom is vital to making their mortgage payments.
That is because the couple rents out the spare bedroom, which is the only way they could afford to own a home in the District, where medium rent is $2,695 per month and the home values are constantly rising. And they’re not alone.
“Right now, I have about four friends who are my age and they are actually in same situation,” Cevera said to NBC News.
Like many people, Cevera sees the home as a worthwhile investment. In fact, real estate is such an important resource for investors that 89% of them are interested in putting their money into real estate.
But for those without the financial resources, investing in housing is a pipe dream. In Rochester, the average millennial needs to save for almost eight years in order to afford an average down payment on a house — and that is on the low side nationally. This number might rise for people of color; the average black family is 13 times poorer than white families, and Latinas nationwide make 54 cents on the dollar to white, non-hispanic males.
According to Scott Astrada, director of federal advocacy at the Center for Responsible Lending, the consequences of Latinx people not being able to find sufficient funding to purchase a home could be severe for the wider economy.
“They have a central place in the housing market and finance system,” Astrada said to NBC News, adding that if homeownership of Latinx Millennials doesn’t rise, it could “jeopardize the housing market and everything tied to it — economic security, wealth building and all that that entails.”